Fern and Brown (1984) claimed that the distinction between industrial and consumer marketing lacked any clear foundation, while more recently Vargo and Lusch (2011) argued that business-business markets underpin the most recent developments in marketing theory overall. In your opinion, is business- to-business marketing distinct from or, the same as consumer marketing?
Industrial and Consumer Marketing Distinctions
The issue regarding a distinction between business to business and consumer marketing is an important aspect that marketing specialists have tried to clear in the attempt of developing more efficient marketing theories. The importance of determining whether or not there is a distinction between these types of marketing relies on the fact that this information would contribute to developing efficient strategies for companies to use when addressing different markets. In order to develop efficient marketing strategies, companies must identify the principles that rule their type of industry. Therefore, it is important to understand if business to business industries are based on different principles in comparison with those of consumer marketing. In addition to this, the distinction between these types of marketing can help differentiate between different business tactics addressed by most companies.
Business to Business and Consumer Marketing Analysis
When trying to answer the question of determining if business to business is different to consumer marketing, there can be several different answers in accordance to the level of the problem that is analyzed. If we analyze a broader perspective of marketing, we'll find that there are little differences between marketing in these different segments. Basically, the principles of marketing that apply to consumer marketing also apply to business marketing. Both types of marketing refer to providing customer satisfaction while benefiting from profits. Companies that sell biscuits and companies that sell security equipment address the same objective of satisfying customers that purchase their products. Both types of companies develop their marketing strategy based on the needs of their customers, and focus their research and development programs on identifying products that can better satisfy these needs.
These types of marketing focus on producing value to their customers. Regarding the marketing mix, the importance of each component is different in the case of each segment. The marketing mix is represented by product, pricing, placement or delivery, and promotional activities (Donovan & Henley, 2010). The promotional activity is more intense in the case of consumer marketing in comparison with business to business marketing.
The literature in the field reveals the fact that there are little differences between business to business and consumer marketing principles. This means the marketing activity in business to business is intended to reach very similar objectives to those of consumer marketing activity. In other words, most of the principles that apply to consumer marketing also apply to business marketing. These forms of marketing have been established based on the marketing principles introduced by Philip Kotler and other specialists in the field. The necessities that determine business to business marketing are similar to those that determine consumer marketing.
However, there are certain differences between business to business and consumer marketing. These differences rely on the way these principles are applied in each situation. In "Business to Business Marketing Management: A Global Perspective" Alan Zimmerman and Jim Blythe address some of these differences. The most important differences identified by the authors rely on the role of advertising in the two types of marketing, the skills of products managers, and the types of strategies in each case.
In the case of consumer marketing, product managers are usually recruited from advertising agencies or from corporate advertising departments. In the case of business to business marketing product managers usually have technical backgrounds. These differences are determined by what and how companies sell to businesses in comparison with consumers. Businesses and consumers obviously have different needs, they must reach different types of objectives, which requires a different approach by business to business and consumer marketing product managers (Zimmerman & Blythe, 2013). When selling to consumers, their interest is usually limited to what the product in case can benefit them. But when selling to businesses, these also require the know how that affects the products they're interested in.
In addition to this, advertising plays a more important role in consumer marketing in comparison with business to business marketing. This is because advertising is the most important activity through which companies inform customers about their products, invite them to buy it, and more importantly, helps companies influence consumer behavior. Product managers must also visit customers in order to have their feedback. In the case of consumer marketing, product managers are active members of the sales team, they develop pricing offers, and make decisions on packaging, but also on product development.
The importance of advertising to consumer marketing in comparison with business to business is accentuated by the numerous channels it is produced. In order to inform customers and determine them to buy their products, companies use TV and radio ads, print advertising, online marketing and social media. Some of these channels are also used in business to business marketing, but only as secondary channels. In this segment, companies prefer public relations activities, sponsoring different events, and organizing conferences where they invite their customers.
Product managers in business to business marketing must offer technical information when visiting their customers. They are often required to inform their customers about how their product is manufactured, technical standards, and others. In addition to this, they must have the technical knowledge that is required in order to answer their customers' questions on different issues.
Regarding the marketing strategy, in business to business marketing this seems to be the same as the corporate strategy. It is required that most of the company's functional areas are included in the marketing strategy. For example, if a security division of a corporation identifies an opportunity of developing social security equipment for a state authority, this requires that sales people address this issue together with the engineering, manufacture and finance department in order to determine how to successfully address this opportunity. This required that these departments change their strategy.
Another difference between business to business and consumer marketing relies on how customers in these segments make the purchasing decision. In the case of consumer marketing, the decision is made on an emotional basis. Although purchasing decisions seem rational, the decision is made emotionally, while reason only explains the emotional decision. This can significantly differentiate the promotional strategy. Consumer marketing focuses on the emotions that customers have regarding the products companies are selling.
In the case of business to business marketing, the buying decision seems to be more rational. In business to business the purchasing decision is usually made by a purchasing team, and all members must agree on which product to purchase. In order to make the purchasing decision, this team requires technical information that is analyzed rationally.
The different marketing approaches to business and consumer segments are also determined by the size of these segments. Within consumer markets we can find millions of individuals, while there are business markets with only few buyers. It is obvious that this changes the relationship between buyers and suppliers. In markets with a reduced number of buyers, suppliers have little power.
The success of companies' marketing strategy also relies on how efficient their market segmentation is. Market segmentation allows companies to identify, understand, and gain information on the customer segments they are targeting. The more specific customer segmentation is, the more efficiently they can address these customers. There are differences between consumer and business segmentation. Consumer markets are segmented based on demographics and psychographics, while business segments are segmented by industry classification codes, product applications, price sensitivity, location, and importance of product.
When analyzing the differences between the different marketing activities within business to business and consumer segments it is important to also focus on distribution. Companies that sell to consumers sell their products directly or through a small chain of distributors. Companies that sell to businesses can sell their products directly to large customers and through other channels. This is the case of companies selling directly to customers or through online stores.
Another important aspect that determines differences between business to business and consumer marketing relies on their approach to the sales force. This approach is similar to that if product managers. The need for different types of sales force is derived from the fact that customers in these segments inform themselves differently when making a purchasing decision. The sales people in business markets must have a background in the field they are selling. Companies in the pharmaceuticals field often use sales people with a pharmaceutical or medical background. This is because their customers have questions that require such background in order to be able to respond to.
The technology involved in manufacturing products represents an important point of focus for business to business customers, but not for consumers. Technology has different effects on these segments. Companies address this issue when developing their marketing strategy.
Similar points-of-view are addressed by Michael Hutt and…